I am a relatively new investor based in Germany and am trying to decide whether to put some money (intended for a house downpayment in 3-4 years) into government bonds. For example this one:


For example this bond has a variable coupon value. While I would assume that the coupon varies as a function of interest rates in the country (Italy). Where can I find a statement of this and of the exact function. Is there something analogous to a key information document (for ETFs) for Bonds that might contain this information? And if so where can I find these documents?

Thank you in advance, Harry

1 Answer 1


For government bonds, the government releases that information, usually for a whole class of bonds (e.g. all semianually bonds with variable rate may work the same way).

For Italy, their Department of the Treasury specifies the exact calculation procedure for Treasury certificates indexed to 6-month Euribor (CCTs-eu) as follows:

CCTs-eu are floating rate bonds with semi-annual coupons in arrears indexed to 6-month Euribor. The coupon calculation procedure is as follow: the simple gross annual simple yield is calculated by adding the 6 month Euribor (rounded to the 3th decimals places) to the spread – defined at the issuance of the new bond (and kept constant for the whole life of the bond). The 6-month Euribor is observed on the second business day before the first accrual day of the coupon (according to what is published on the page of the Reuters circuit EURIBOR01, at 3:00 p.m. (CET), or from another source of equal rank in case this is not available; when also this last source is not available, the 6 month EURIBOR of the first business day for which it is available, going backwards in time, will be used). The 6 month coupon rate is determined multiplying the gross annual simple yield by dividing the actual days of the reference semester by 360 (Actual/360 Convention). The coupon amount is calculated multiplying the 6 month coupon rate by the bond’s face value, rounded to one euro cent. As far as the actual interest payment is concerned, there is a 6 month lag between the coupon definition and its payment. Finally, in this regard, it is worth recalling the Ministerial Circular n. 5619 of 21 March 2016 which has established in the event of the parameter for determining the coupon falling to a negative level sufficient enough for totally eroding and exceeding the spread, the coupon must be set at zero.

The spread for your specific bond is 0.5% according to the auction results, and the current semi-annual coupons (calculated from their formula) can be found on their statistical data site (e.g. 2.349% for the next maturity date in April).

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